TEMPE, Ariz.--(BUSINESS WIRE)--
Limelight Networks, Inc. (Nasdaq:LLNW) (Limelight), a global leader in
digital content delivery, today reported revenue of $45.4 million for
the second quarter of 2017, up four percent compared to $43.6 million in
the second quarter of 2016, and up one percent compared to $44.7 million
in the first quarter of 2017. Currency headwinds negatively impacted
year-over-year comparison by $0.3 million, or one percent.

Gross margin was 47.1% in the second quarter of 2017, an increase of 390
basis points from 43.2% in the second quarter of 2016.

On a GAAP basis, Limelight reported a net loss of $1.6 million, or $0.01
per basic share, for the second quarter of 2017, compared to a net loss
of $57.9 million, or $0.56 per basic share, in the second quarter of
2016. The second quarter of 2016 net loss included a $54 million
provision for litigation related to the settlement of the Akamai lawsuit.

Non-GAAP net income was $2.9 million, or $0.03 per basic share, for the
second quarter of 2017, compared to non-GAAP net income of $0.6 million,
or $0.01 per basic share, in the second quarter of 2016.

EBITDA was $3.4 million for the second quarter of 2017, compared to
negative $52.4 million for the second quarter of 2016. Adjusted EBITDA
was $7.9 million for the second quarter of 2017, compared to $6.2
million for the second quarter of 2016.

Limelight ended the second quarter with 533 employees and employee
equivalents, up from 528 employees at the end of the first quarter of
2017, and up from 512 employees in the year ago period.

“Our second quarter results continued to show meaningful year-over year
improvements across revenue, margin, profitability and cash flow
measures. Our performance improvements have strengthened our financial
profile and improved our competitive position. Demand for our
capabilities and services is growing and our R&D investments and
strategic focus are continuing to gain traction. We continue to pursue
numerous internal and external opportunities to accelerate growth and
profitability and expect their realization to generate incremental
shareholder returns,” said Bob Lento, Chief Executive Officer at
Limelight.

“Our solid and consistent first half performance coupled with growing
confidence as to our second half outlook, leads us to expect that we can
deliver full year 2017 results above our previous guidance. We believe
we may deliver close to double digit revenue growth for the two
remaining quarters, and along with improving margins and continuing
expense discipline, Limelight’s 2017 performance could represent our
best year since we became a publicly traded company,” Mr. Lento added.

Based on current conditions, for the full-year 2017, we are providing
the following updates to our previously announced guidance for 2017:

To evaluate our business, we consider and use non-generally accepted
accounting principles (Non-GAAP) net income (loss), EBITDA and Adjusted
EBITDA as supplemental measures of operating performance. These measures
include the same adjustments that management takes into account when it
reviews and assesses operating performance on a period-to-period basis.
We consider Non-GAAP net income (loss) to be an important indicator of
overall business performance. We define Non-GAAP net income (loss) to be
U.S. GAAP net income (loss) adjusted to exclude provision for
litigation, share-based compensation, litigation expenses and
amortization of intangible assets. We believe that EBITDA provides a
useful metric to investors to compare us with other companies within our
industry and across industries. We define EBITDA as U.S. GAAP net income
(loss) adjusted to exclude depreciation and amortization, interest
expense, interest and other (income) expense, and income tax expense. We
define Adjusted EBITDA as EBITDA adjusted to exclude provision for
litigation, share-based compensation and litigation expenses. We use
Adjusted EBITDA as a supplemental measure to review and assess operating
performance. Our management uses these Non-GAAP financial measures
because, collectively, they provide valuable information on the
performance of our on-going operations, excluding non-cash charges,
taxes and non-core activities (including interest payments related to
financing activities). These measures also enable our management to
compare the results of our on-going operations from period to period,
and allow management to review the performance of our on-going
operations against our peer companies and against other companies in our
industry and adjacent industries. We believe these measures also provide
similar insights to investors, and enable investors to review our
results of operations “through the eyes of management.”

Furthermore, our management uses these Non-GAAP financial measures to
assist them in making decisions regarding our strategic priorities and
areas for future investment and focus.

The terms Non-GAAP net income (loss), EBITDA and Adjusted EBITDA are not
defined under U.S. GAAP, and are not measures of operating income,
operating performance or liquidity presented in accordance with U.S.
GAAP. Our Non-GAAP net income (loss), EBITDA and Adjusted EBITDA have
limitations as analytical tools, and when assessing our operating
performance, Non-GAAP net income (loss), EBITDA and Adjusted EBITDA
should not be considered in isolation, or as a substitute for net income
(loss) or other consolidated income statement data prepared in
accordance with U.S. GAAP. Some of these limitations include, but are
not limited to:

EBITDA and Adjusted EBITDA do not reflect our cash expenditures or
future requirements for capital expenditures or contractual
commitments;

these measures do not reflect changes in, or cash requirements for,
our working capital needs;

Non-GAAP net income (loss) and Adjusted EBITDA do not reflect the cash
requirements necessary for litigation costs, including provision for
litigation and litigation expenses;

these measures do not reflect the interest expense, or the cash
requirements necessary to service interest or principal payments, on
our debt that we may incur;

these measures do not reflect income taxes or the cash requirements
for any tax payments;

although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will be replaced sometime in
the future, and EBITDA and Adjusted EBITDA do not reflect any cash
requirements for such replacements;

while share-based compensation is a component of operating expense,
the impact on our financial statements compared to other companies can
vary significantly due to such factors as the assumed life of the
options and the assumed volatility of our common stock; and

other companies may calculate Non-GAAP net income (loss), EBITDA and
Adjusted EBITDA differently than we do, limiting their usefulness as
comparative measures.

We compensate for these limitations by relying primarily on our U.S.
GAAP results and using Non-GAAP net income (loss), EBITDA, and Adjusted
EBITDA only as supplemental support for management's analysis of
business performance. Non-GAAP net income (loss), EBITDA and Adjusted
EBITDA are calculated as follows for the periods presented in thousands:

Reconciliation of Non-GAAP Financial Measures

Limelight is presenting the most directly comparable U.S. GAAP financial
measures and reconciling the non-GAAP financial metrics to the
comparable U.S. GAAP measures. Per share amounts may not foot due to
rounding.

For future periods, we are unable to provide a reconciliation of EBITDA
and Adjusted EBITDA to net loss as a result of the uncertainty
regarding, and the potential variability of, the amounts of depreciation
and amortization, interest expense, interest and other (income) expense
and income tax expense, that may be incurred in the future.

Conference Call

At approximately 4:30 p.m. EST (1:30 p.m. PST) today, management will
host a quarterly conference call for investors. Investors can access
this call toll-free at 888-317-6016 within the United States or +1
412-317-6016 outside of the U.S. The conference call will also be audio
cast live from http://www.limelight.com
and a replay will be available following the call from the Limelight
website.

Forward-Looking Statements

This press release contains forward-looking statements that involve
risks and uncertainties. These statements include, among others,
statements regarding our expectations regarding revenue, gross margin,
non-GAAP net income, capital expenditures, litigation, and our future
prospects. Our expectations and beliefs regarding these matters may not
materialize. The potential risks and uncertainties that could cause
actual results or outcomes to differ materially from the results or
outcomes predicted include, among other things, reduction of demand for
our services from new or existing customers, unforeseen changes in our
hiring patterns, adverse outcomes in litigation, and experiencing
expenses that exceed our expectations. A detailed discussion of these
factors and other risks that affect our business is contained in our SEC
filings, including our most recent reports on Forms 10-K and 10-Q,
particularly under the heading “Risk Factors.” Copies of these filings
are available online on our investor relations website at
investors.limelightnetworks.com and on the SEC website at www.SEC.gov.
All information provided in this release and in the attachments is as of
July 26, 2017, and we undertake no duty to update this information in
light of new information or future events, unless required by law.